An IVA or Individual Voluntary Agreement can help anyone who is experiencing problems clearing their debt. It is an eminently appealing offer to family’s who would risk losing their home if they became bankrupt.

You could benefit from an IVA if;
Your lenders have already refused to accept an informal debt management arrangement
You formerly had an informal arrangement, but you could not adhere to its terms.

You have so many creditors that an informal debt management arrangement would not be practical. You are being made bankrupt, alternatively you are currently bankrupt and you want to reverse that position. You previously had an informal arrangement, but you could not keep up withits provisions.

Your creditors have already refused to accept an informal debt management arrangement
You are being made bankrupt, alternatively you have already become bankrupt and you want to alter that situation.

You have so many creditors that an informal Debt Advice arrangement would be impractical.

You may have a start up company which you would be unable to keep running if you became bankrupt. You would lose your job if you are made bankrupt, jobs such as accountants, solicitors, police man and armed forces. You have a significant amount of disposable capital but it is still not enough to fully repay your debts. You want a formal arrangement with your creditors to accept that lump sum and write off the balance of what you owe.

You have equity in your house. You will not necessarily lose your house if, with the agreement of the IP and your creditors, it can be kept out of the Individual Voluntary Agreement. However, your lenders will normally ask for as much of the equity in your house as they can get. With an IVA you are less hampered restricted as with bankruptcy. EG, with an Individual Voluntary Agreement you are not obligated to inform your building society. Therefore, you can still be able to use your bank account.

And the disadvantages?
If you fail to comply to the terms of your IVA, then the Insolvency Practitioner who is supervising your Individual Voluntary Agreement (IVA) or your lenders, can ask for your bankruptcy.

If three quarters of your creditors fail to acquiesce to your proposed Individual Voluntary Agreement (IVA) you are effectively back to square one. It will be 12 months before you can make another IVA proposal. You should carefully prepare your offer.
If you are a mortgagee, it could be that under the terms of the IVA or Individual Voluntary Agreement you have to sell your house. An alternate approach is to include a clause in your IVA whereby you have your home valued after an prearranged amount of time with the aim of releasing the “equity” in your property at that time, to your creditors. Your lenders may agree to you paying monthly IVA instalments for an additional year to cover the amount of equity in your home.

If your money situation changes and you are unable to afford the repayments, unless your Insolvency Practitioner can coerceyour lenders to agree to a revised agreement, your IVA will terminate. This can mean you are facing bankruptcy.